Mayor Brandon Johnson’s administration quietly signed a new $40 million agreement this week with Kansas-based Favorite Healthcare Staffing to continue to staff the city’s migrant shelters through October of next year.
The Johnson administration has faced growing criticism over the increasing costs of caring for and sheltering migrants, 19,000 of whom have arrived in Chicago over the past year.
The latest census from the city shows more than 11,000 asylum seekers were staying in the shelters this week with more than 3,000 living at Chicago police stations.
NBC 5 Investigates was first to reveal that Favorite Healthcare Staffing has received at least $56 million over the past year to staff the migrant shelters, city finance records show. The bulk of the criticism, raised by city aldermen and citizens alike, has been over the hourly rates.
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An NBC 5 Investigates’ review of invoices for 400 Favorite Healthcare Staffing employees showed that Favorite routinely billed for 84 hours of work per week for most of their employees and that those rates ranged from nearly $50 to $156 an hour for regular pay and from $75 to $234 an hour for overtime during the four-week period we examined.
For employees assigned to housekeeping, according to the invoices, Favorite Healthcare Staffing billed the city of Chicago for four weeks at a median pay rate of $17,000 for each of their housekeepers. At that rate, taxpayers could have potentially paid a median rate of approximately $221,039 annually for each housekeeper supplied by Favorite.
When it came to employees assigned to security, the invoices show that Favorite charged Chicago taxpayers a median payrate of $24,000 apiece for each security guard, for four weeks’ worth of work. That translates to an annual charge, for each security guard, of $312,000.
The invoices also show that for one registered nurse at the shelters, Favorite billed Chicago a total of more than $64,272 for four weeks’ worth of work. At that rate, taxpayers could’ve potentially paid more than $830,000 in a year for this single nurse.
“Whether it’s a federal tax dollar, a state tax dollar or a Chicago tax dollar, it’s still money being wasted. And so we need to see a much better result from the Johnson administration,” Ald. Brendan Reilly said Wednesday outside the city council chambers. “They claim they’ve negotiated better rates; we will need to see the proof of that. Anything is a better rate than $24,000 a month for one security guard…”
The Johnson administration has said that the hourly rates were inflated to cover administrative costs like housing and transportation and that it has worked to re-negotiate those rates, including in this latest agreement.
While the new contract does detail rate reductions, which the Johnson administration says will lead to additional costs savings, the reductions weren’t equally dispersed among all positions, according to an NBC 5 Investigates’ review. Some rates were reduced more than others.
And what hourly rates the workers receive could depend entirely on if they’re hired locally from Chicago or if they are from out-of-state and need Favorite to continue to cover their housing and transportation expenses, according to the contract. The newly reduced rates ranged from $40 to $156 per hour.
For example, an NBC 5 Investigates’ review of the new rates found that while Favorite Staffing used to bill for $80 per hour for some of its workers, those rates will be reduced to $68 per hour if the staffer requires housing to be covered, or as low as $48 if they’re a local hire.
According to NBC 5 Investigates’ previous analysis of invoice records, Favorite Healthcare Staffing billed for 84 hours per week including overtime for most of its employees. That means – if the company continues to bill at those hours – the newly reduced hourly wages for some positions could still cost taxpayers between $264,000 to $374,000 annually for each worker.
Other positions under the new contract, like facility managers and nurses, remained as high as $108 to $156 per hour before overtime according to the contract. That means even with hourly rate reductions, Favorite Healthcare Staffing could still charge the city for six-figure annual salaries for most of its employees working in the shelters.
Favorite Healthcare Staffing has not returned repeated calls and emails this week seeking comment.
A spokesman for Mayor Brandon Johnson did not respond to the recent criticism but did state in an email that the "Johnson administration has been working closely with Favorite to control costs, which encourages Favorite to shift to a regional rather than a national staff recruitment model.” The emailed statement went on to state that the Johnson administration has re-negotiated these rates and that starting in October “the city will see another significant reduction in staffing rates…” and that the company will “focus on hiring local candidates almost exclusively” going forward.
In its commitment letter, dated Oct. 16, Favorite Healthcare Staffing acknowledged that that staffing needs will be “directed by the city of Chicago” but that “any further changes in rates must be approved by both Favorite and the City of Chicago via an amendment to the current contract.”
